Gard Marine and Energy Ltd v China National Chartering Co Ltd and Others: ComC 30 Jul 2013

The vessel ‘Ocean Victory’ grounded in 2006 entering a port in a storm.
Held: In the first action, that the intermediate charterers were liable to the demise charterers for breach of the safe port warranty in the time charter, and likewise, in the third-party proceedings, that the charterers were liable to the intermediate charterers for breach of the safe port warranty in the sub-charter. The court rejected the charterers’ argument that the cause of the casualty was not the breach of the safe port warranty, but rather the master’s navigational decision to put to sea in extreme conditions, and also the charterers’ contention that the demise charterers, were not, even assuming a breach of the safe port warranty, liable to the owners in respect of the loss of the vessel, and that, in the circumstances, the demise charterers had suffered no loss in respect of the loss of the vessel, and accordingly had no claim to pass on to the intermediate charterers, or, in turn, the charterers. The casualty was caused by the unsafety of the port in breach of the safe port undertaking in the time charters.
The Court awarded Gard substantial damages, namely the agreed value of the vessel (US$88.5m), damages in respect of liability for SCOPIC expenses (US$12m), damages for wreck removal expenses (US$34.5m) and damages for loss of hire (US$2.7m).
The events which led to the grounding and subsequent loss of the vessel were: ‘The danger facing OCEAN VICTORY was one which was related to the prevailing characteristics of Kashima. The danger flowed from two characteristics of the port, the vulnerability of the Raw Materials Quay to long swell and the vulnerability of the Kashima Fairway to northerly gales caused by a local depression. It may well be a rare event for these two events to occur at the same time but nobody at the port could, I consider, be surprised if they did. There is no meteorological reason why they should not occur at the same time. Long waves were clearly a feature of the port (as they must be of any port facing the Pacific) and low pressure systems generating gale force winds cannot, in my judgment, be regarded as abnormal. I do not consider that the juxtaposition of long waves and a low pressure system generating gale force winds from the north amounts to an abnormal occurrence unrelated to the characteristics of Kashima. Long waves may give rise to a need for a vessel to leave the port. It may be a matter of chance whether at that time there is also a low pressure system generating gale force winds from the north but I am unable to accept that such winds are so rare that they cannot be said to be a feature of the port. It is not without significance that the Guide to Port Entry notes that during periods of northerly swell the entry channel is fully exposed and that vessels at low speed generally have difficulty in steering.
It may be that the storm which affected the port on 24 October 2006 was one of the most severe storms to have affected Kashima in terms of severity, speed of deterioration and duration as suggested by Mr Lynagh’s analysis of its characteristics. But the relevant characteristics are those which give rise to the danger, namely the occurrence of long waves and northerly gales. Neither long waves nor northerly gales can be described as rare. Even if the concurrent occurrence of those events is a rare event in the history of the port such an event flows from characteristics or features of the port.’


Teare J


[2013] EWHC 2199 (Comm), [2013] 2 CLC 322, [2014] 1 Lloyd’s Rep 59, [2013] 2 All ER (Comm) 1058




England and Wales


CitedTyco Fire and Integrated Solutions (UK) Ltd v Rolls-Royce Motor Cars Ltd CA 2-Apr-2008
. .
BindingCMA CGM Sa v Classica Shipping Co Ltd ‘The CMA Djakarta’ CA 12-Feb-2004
The charterers were held liable to the shippers for the cost of repairing the vessel when containers containing bleach exploded. The charterers had established a compensation limitation fund in France.
Held: The liability of the charterers was . .

Cited by:

Appeal fromGard Marine and Energy Ltd v China National Chartering Co Ltd CA 22-Jan-2015
The Ocean Victory went aground in a storm in Kashima port. The court was now asked (i) what, as a matter of law, was the correct test for an abnormal occurrence; (ii) in particular, was the judge correct to hold that the combination of two weather . .
At First InstanceGard Marine and Energy Ltd and Another v China National Chartering Company Ltd and Another SC 10-May-2017
The dispute followed the grounding of a tanker the Ocean Victory. The ship was working outside of a safe port requirement in the charterparty agreement. The contract required the purchase of insurance against maritime war and protection and . .
Lists of cited by and citing cases may be incomplete.


Updated: 05 August 2022; Ref: scu.513727